Pakistan, Afghanistan resume trade talks after year-long pause

Officials have resumed trade talks in an attempt to boost bilateral trade volume between Pakistan and Afghanistan. According to credible reports, this development has come to light after trade talks were put on hold over a year ago.

If trade relations improve, cross-border cargo movement could surge. Reports indicate that high-profile discussions regarding international trade were held in early 2024 when senior Pakistani officials met with Afghanistan’s Minister for Industry and Commerce, Nooruddin Azizi, in Kabul.

Facing a slew of international sanctions, Afghanistan remains largely cut off from the rest of the world. However, lawmakers and officials in Kabul want to access global markets.

Afghanistan’s Commerce Ministry has released a statement outlining calls to renew the Afghanistan-Pakistan Transit Trade Agreement (APTTA). Moreover, the statement highlighted the demand for exporting Afghan goods, such as coal, to Pakistan.

According to the Observatory of Economic Complexity, Pakistan imported a staggering $647 million worth of coal briquettes in 2023. While part of this import demand was satisfied by Afghan coal, South Africa and Indonesia were also major suppliers.

However, many believe that importing from Afghanistan would be a good economic decision, as it could reduce transportation costs. Afghanistan seems poised to seize this opportunity, as the commerce ministry’s statement reportedly mentions the need for counter-smuggling commodities.

Afghan officials have talked about operationalising Torkham port while utilising Ghulam Khan port to facilitate commercial activities. Moreover, they have expressed interest in the crossing of heavy vehicles for cargo transit and the possibility of banks providing guarantees. 

Afghanistan’s financial system remains handicapped as $9.4 billion of the war-torn country’s reserves remain frozen by the United States (US). Gaining access to Pakistan’s banking network for commercial reasons could significantly benefit Afghanistan’s economy.

Afghanistan’s Minister for Industry and Commerce is leading a delegation to Pakistan to boost bilateral trade relations. He met his counterpart, Commerce Minister Jam Kamal Khan, to discuss potential avenues of collaboration.

According to reports, Pakistani officials have suggested creating a joint committee to address concerns related to trade. Pakistan stands to benefit from boosting ties with Afghanistan.

In the first eight months of FY 2024-25, year-on-year exports to Afghanistan grew by a respectable 84.25 percent. Import volumes have logged a sharp increase as well, as imports jumped from $5.47 million in the first eight months of FY 2023-24 to $18.21 million during the current fiscal year.